Oxiana wants to be the next WMC

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Oxiana is to announce its aggressive development plans for the
Prominent Hill copper-gold project in South Australia's Gawler
Craton tomorrow.

The development is part of the Melbourne group's plan to become
a mid-cap replacement in the market for WMC after that group's $9.2
billion absorption by BHP Billiton.

The planned release of a pre-feasibility study into the
development of the Prominent Hill orebody, 650 kilometres
north-west of Adelaide, is expected to confirm robust project
economics and a first-production target of 2008.

Based on the known mineralisation of 1.5 million tonnes of
copper and 2.6 million ounces gold, Oxiana is planning a "starter"
project of about eight years which would yield annual production of
about 100,000 tonnes of copper (in concentrates) and 100,000 ounces
of gold.

Based on two-year-old figures, the development cost of Prominent
Hill was provisionally priced at about $350 million. But cost
increases in everything from cement and steel to labour will mean
the pre-feasibility study is unlikely to come in with development
costs of less than $400 million at least.

Offsetting the construction cost increases has been the more
than doubling of the copper price since Prominent Hill first became
a development opportunity. Tomorrow's report is also likely to
point to the potential for some infrastructure costs to be laid off
with infrastructure investment funds.

Prominent Hill will start out as as an open-cut development to a
depth of about 500 metres, with production in future years to come
from an expected move to underground mining operations. The initial
open-cut development will require the removal of about 100 metres
of sedimentary cover.

Prominent Hill lies 130 kilometres to the north-west of
WMC-BHP's Olympic Dam copper-uranium-gold mine. Because Olympic Dam
has had trouble matching its underground mining rates to the
capacity of its processing facilities, there has been speculation
that Prominent Hill's copper concentrate could make its way
there.

Ahead of the pre-feasibility study release, Oxiana will today
release its profit report for the June half. Analysts have forecast
a profit of about $14 million from the group's gold production and
initial production from the group's new copper mine in Laos.
Earnings are forecast to surge in the second half, taking annual
profit to $65 million.

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1124562748320-smh.com.auhttp://www.smh.com.au/news/business/oxiana-wants-to-be-the-next-wmc/2005/08/21/1124562748320.htmlsmh.com.auSydney Morning Herald2005-08-22Oxiana wants to be the next WMCBarry FitzGerald{Business}BusinessNews